All Forum Posts by: Austin Fowler

Quote from @Austin Fowler:

Is there anyone that both manages their own properties, and has managed to acquire many properties? What systems do you use to achieve scale? Anyone still buying long term rentals at the moment? If so, where and how and can you achieve positive cash flow?

My view is if you hire out virtually al, the work and have systems to automate the routine, the number can be real high.

we have mid 20s but the 4 STRs have either a PM or a co-host which puts us ~20 units self managed.   I chose to train handy people and show them the path of RE which takes time and some of them never choose RE.   However my most successful protege (he was also likely my best handyman) is a rockstar investor.   He once indicated he was going to catch me in terms of re assets but I believe no longer has that as a goal.  He recently did a repurpose of a property that had a value of $1m under its acquisition purpose but he sold for $1.5m to a developer leveraging a local law that was recently over turned in large part because of this case.

if I hired all work out without doing any training or mentoring, I suspect I could do it on less than a half hour a unit with our processes.   If we used a VA, I suspect we could get it down to less than 0.25 hours/unit.   To get there we would need to document more of our processes.  We have many of our process documentation nearly complete, but not hand off with no guidance complete.

BTW I allocate what most would consider too high maintenance/cap ex but I believe is fairly accurate (ask people how they derived their maintenance/cap ex allocation and you will hear some crazy responses from I used the default percent in my rental calculator, I use actuals but have only had rentals some timespan that is far short of large cap ex item lifespans, to I did not allocate anything because I have reserves (how do they project a cash flow?) and we have good enough cash flow to pretty much do what we desire.  What I desire is making more money using my intelligence.   I also like mentoring select people.  Travel, fishing, hiking/backpacking, snorkel/Scuba.  What I really like is to be able to choose what I want to do most days (I am typing this from a remote location in the sierras).

wishing great success to all

@Austin Fowler

I self manage 30 properties and it’s easy. I use apartments.com for all of it and it’s free. I’m mostly in the Dallas area where I live, but bought my last 12 in Arkansas and Missouri. I bought two in Missouri for 63k last month that rent out for $1950 total between both of them. I took them sight unseen “as is” which has worked out well for me so far.

Systems certainly help but asset class plays a critical role as well. Obviously NNN leased properties, particularly those with credit tenants who often possess their own systems and asset management teams provide the most hands-off management. Within the residential/multi-family space more expensive real estate is generally easier to manage. Assuming tenants are screened properly, the tenant is going to require less oversight, and the properties can absorb cap ex easier than lower cost real estate meaning systems can be replaced rather than the need to continually implement band-aid fixes.

@Austin Fowler

When we first bought our properties our rule of thumb was that any rental we bought had to cash flow at least $300 after principal, interest, taxes, insurance, and a $100 maintenance reserve.  After 5-8 years of rent increases, plus selling some properties where we had good capital gains after the Covid era and paying off other properties with those gains, our cash flow really increased substantially.  Our average cash flow today is over $700/door.  So we are able to not only live comfortably on that cash flow, but also fund any necessary capital improvements.  We probably have about $1.5mm invested in our properties, but their market value is probably close to $6mm today (before mortgages).  I can’t take credit for it other than buying smart… the market really just exploded between 2020 and 2023 and the value of our portfolio just skyrocketed.  Our typical $ / square foot purchase price was about $78.  Today they have increased to about $180-$200/sf.  

The daily pace is easy enough that we also take on flips one at a time… so we have done about 8 of those now where we have also put money towards paying off loans on our portfolio.  We will typically net $50-$100k on our typical flip before capital gains.  Between the bread and butter rentals and the flips it keeps us fairly busy most days… typically always something that needs to be attended to… so it isn’t all ‘sunshine and butterflies’… but we get up when we want to, and most days are pretty relaxed.  Then there are the rare days when you get a call that your tenant caught your unit on fire (has happened twice to us in 8 years).  So again, it does have its moments! 

But on a typical day we set our own schedule… so it is possible to get there over time. Buying right is probably the most important part.  You have to  start off with cash flow…. You can’t be cash flow negative starting off and hope it works out.  

Randy

As with any new technology there's a lot of tools to build Apps (and websites). I use Lovable.dev

Honestly, it's scary what AI can do.

Sign up for a Lovable free trial, and give it a command:

"Create a property management Lease Tracker Application"

Once it creates it, you can add features:

"Add functionality to manage Maintenance requests"

Or, something like "Create a Guest payment App for someone to pay rent online"

You can have it create listing pages, portfolio or property-specific websites.

Or, use ChatGPT by saying "Create a Louisiana Lease for the tenant ... with these terms..."

Imagine that you have a professional programmer sitting next to you, and simply telling them what you want.

I have owned and self-managed between 80-200 doors in Albuquerque, New York and New Orleans, I've always been out-of-state. As they say, necessity is the mother of invention.

Best

George

@Austin Fowler

All the properties are in the same county that we live in. Maintenance issues are typically a phone call to either an AC tech or Plumber.    We give the vendor our tenants name & phone number and then have them call and set up the appointment so we don’t have to be the relay between the two.  I’ve literally called the plumber from Egypt before!   Very seldom am I needed at a property.  

When we first started out, we tried to do as much of the maintenance as we could ourselves.  we are 8 years into our ‘journey’ and as  time has gone by and there was enough money in the maintenance budget, we just prefer to farm the maintenance out.  We found a good handyman for medium level maintenance items like painting a house, etc.   Sometimes we will take those tasks on…  It’s more a question how much free time we have versus how expensive the quote is for any given task.  We budget $100-125/ door/ month into a dedicated maintenance account, which will cover basic things like hot water heaters, ac maintenance, septic clean outs, etc.  it doesn’t cover roofs, or many major things like AC replacements… though we will occasionally get enough in that account to offset major items.  

Randy 

Hi Austin, I've been managing my own properties for many years, and as you know, property management involves many moving parts. I've always focused on the idea of building systems. Whether its for maintenance crews and vendors, leasing processes, rent collection and tenant communications.

Every property is unique, every portfolio is unique - so with a good system, you can absorb new properties and make everything work.

To build your system, it's good to focus on tools instead of one big platform. That said, I have been looking at AI. You can use it to build tools whenever you need one. Examples:

1. "Create a property management App for Lease Tracking"

2. "Create an App for my maintenance crew to take pictures and submit them to me easily"

3. "Create an App that allows tenants to pay online via Card or ACH"

4. "Write a lease for the tenant ... with these terms ..."

Cash Flow - With skyrocketing insurance and maintenance costs, and softening rent rates, I focus on getting my administrative costs as low as possible by using on-demand remote workers and building my own AI tool-chest.

Hope this helps

George  

@Austin Fowler

Hi Austin,  we have 37 rentals we self manage.  My best suggestion to you is to automate where you can.  Our favorite automation tool is one of the cloud based Property Management systems out there.  We use Rentec Direct, which costs us about $2 per door per month… but there are many out there and most offer a pretty comprehensive suite of features.  
It collects our rent, deposits it to our bank account, applies late fees, allows for use of credit cards, screens our tenants, has a full accounting suite with reporting, broadcasts our vacancies on 20-30 websites, collects applications, lets our tenants report maintenance issues, and much more.  

The 35-40 number has worked well for us.   It’s not too busy, and we are able to travel regularly, including internationally.  

We used traditional financing on almost all of our units.  We had the advantage of buying between 2018-2021, when prices and interest rates were more favorable.  It is just technically harder to achieve today if for no other reason the interest rates and run-up in prices from the Covid era.  It has been getting better in my opinion recently.  We didn’t buy any properties for about  2 years between 2021 and 2023, but have bought couple properties in the past 2 years. 

All the best!

Randy